The Homeland Security Department released an audit report this week filled with evidence that the Transportation Security Administration mismanaged a $1 billion Information Technology Managed Services (ITMS) contract. But the report concludes that the agency has since adopted a better-managed acquisition strategy.
Acting on recommendations from DHS’ Inspector General Richard Skinner, TSA terminated a $1 billion contract that it had awarded to Unisys for secure telecommunications, IT infrastructure and managed services at 429 airports, 21 field offices and TSA’s Command Center.
TSA awarded the contract in 2002. By the beginning of fiscal 2006, spending had nearly reached the contract ceiling, even though TSA had received from Unisys only about a third of the deliverables for which it had contracted.
Under a new bridge contract with Unisys, Skinner wrote that TSA has implemented sound business practices and addressed the weaknesses that the IG’s office identified in an earlier draft audit report. The bridge contract allows TSA to retain equipment leased under the initial ITMS contact and supports the agency’s transition to competitively awarded new business opportunities, according to the IG’s report.
Skinner’s report addresses the concerns of Rep. Don Young (R-Alaska), chairman of the House Committee on Transportation and Infrastructure, who requested the audit. The report presents considerable evidence of poor contract management but appropriate use of small businesses. “TSA has taken an aggressive approach to ensure that Unisys complies with small-business subcontractor management responsibilities,” Skinner wrote.
The report faults Unisys for performing work numerous times under the ITMS contract without receiving authorizations from TSA’s contracting office to proceed. Among the most glaring evidence of mismanagement it presents is that 83 percent of the contract’s spending ceiling had been spent in less than half of the allotted time for the contract.
Skinner also notes that TSA did not begin using mandatory earned value management discipline until fiscal 2004, and then only on a few portions of the contract. Office of Management and Budget officials told the IG that agencies have been required since fiscal 2002 to use earned value management for large IT projects to avoid the cost overruns that TSA failed to control.
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